Chakwera lobbies for debt restructurng
President Lazarus Chakwera has asked the African Export-Import Bank (Afreximbank) to consider a debt restructuring plan that would allow Malawi to secure the International Monetary Fund’s (IMF) Extended Credit Facility (ECF).
The President made the appeal on Sunday during a high-level meeting he held with the Afreximbank president and board chairperson Benedict Oramah in Accra, Ghana on the sidelines of the bank’s 30th annual general meeting.
Malawi owes Afreximbank about $757 million (about K784 billion) in foreign debt and about $145 million (about K150.2 billion)is owed to Trade and Development Bank, along with millions of arrears, according to the IMF.
Chakwera said the ECF would help in restoring Malawi’s repayment capacity by rebuilding reserves and reducing the macroeconomic imbalances.
He said: “Our engagement with you regularly over the past few months was, therefore, in pursuit of a debt restructuring mechanism that would allow us to fully restore debt sustainability and unlock an ECF for Malawi that would eventually yield dividends for both Malawi and the bank.”
The meeting was one of several crucial meetings Chakwera is schedule to hold while in Accra where he is attending the Afreximbank annual meetings.
Chakwera, who was accompanied by other govoernment officials, including Minister of Finance and Economic Affairs Sosten Gwengwe, thanked Afreximbank for embracing the country’s long-term development plan Malawi 2063 to help it achieve food security, wealth creation and job creation through financial support towards the development of mega farms and industrial parks.
Oramah, who was flanked by Afreximbank executive vice-president for Intra-African Trade Bank Kanayo Awani and some board members, said they were in solidarity with Malawi’s pursuit of the debt restructuring mechanism to secure the ECF.
“We will do everything we can to resolve the issues and it is always refreshing listening to your commitment and understanding of the issues we are dealing with,” he said.
Oramah said his institution has for a long time provided financial support to Malawi, which is one of the founding shareholders of the bank.
He said the bank is engaged in transformative projects in Malawi such as the support towards the development of mega farms that will result in food security.
Oramah touted the industrial parks project, which he said will help the country create jobs.
“We want to commence these projects soon because we want to follow the President’s directive for timely implementation,” he said.
Malawi’s public debt stands at K7.9 trillion as at December 2022, with K4.43 trillion domestic debt and K3.47 trillion is external debt.
